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Basic-Fit: Predictable Growth Of 20%

Feb. 07, 2019 12:26 PM ETBasic-Fit N.V. (BSFFF)PLNT, TGOPY1 Comment


  • Basic-Fit is the largest fitness chain in Europe, is growing more than 20% annually and will open more than 100 new fitness clubs in 2018.
  • Return On Invested Capital (ROIC) of fitness clubs, which are open more than 3 year, is 35%.
  • The low cost subscription based business model ensures stable cash flows and creates a strong moat.
  • CEO and founder René Moos owns 22% of the shares of the company.
  • This fast growing company seems undervalued based on a Price/FCF ratio of only 15.


Basic-Fit (OTCPK:BSFFF) is the largest fitness chain in Europe with 586 fitness clubs at the end of Q3 2018 in The Netherlands, Belgium, Luxembourg, France and Spain according to the Q3 2018 Trading update. On June 10th 2016 Basic-Fit was listed on Euronext Amsterdam with ticker AMS:BFIT and the stock can be traded on the US OTC markets with ticker OTCPK:BSFFF. The stock price has increased from €15 to €27.20 during the 2.5 years after the IPO.

The objective of Basic-fit is to provide affordable high quality fitness facilities and to make fitness accessible to everyone. At the end of Q3 2018 the number of memberships was 1.78 million. This is an increase of 21% year on year. A membership pass gives members access to all fitness clubs in all countries and the fitness pass can be shared by family members. The business model is similar to Planet Fitness (PLNT) in the United States. However, Basic-Fit owns all clubs and does not use a franchise model.

In 2017 Basic-Fit opened 102 new fitness clubs. In 2018 Basic-Fit expects to open at least 100 new clubs. The picture below shows the growth of the number of fitness clubs.

Growth of fitness clubsThe pipeline of club openings is shown in the picture below. It shows that Basic-Fit is on track to continue to open at least 100 clubs a year. The France market still offers many opportunities to open new fitness clubs. The growth in the Benelux is stabilizing.

Year on Year revenue growth was 22% in Q3 2018.

Competitive Position

Basic-Fit has several sustainable competitive advantages, which include the Basic-Fit brand, lowest cost provider of fitness facilities and economies of scale. Economies of scale include lower relative overhead costs, lower marketing costs, the use of technology and increased buying power to obtain fitness equipment at favorable terms. The location

This article was written by

I am a value and quant investor specialized in special situations.

Analyst’s Disclosure: I am/we are long BSFFF. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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